Why Is a UAE TRC Important ?

If your company is based in the UAE but earns money from other countries — for example, by selling services abroad, working with international clients, or holding investments — those foreign countries might charge tax on that income.

Without the right paperwork, you could end up paying tax in the UAE and again overseas — that’s double taxation.

This is where a UAE Tax Residency Certificate (TRC) can help.

With a valid UAE TRC, you can:

• Prove that your business is a tax resident of the UAE
• Avoid being taxed twice on the same income
• Use tax agreements between the UAE and other countries to reduce or remove extra taxes
• Save money that would otherwise go to foreign tax authorities

In short, if your business has clients, contracts, or earnings from outside the UAE, the UAE TRC helps protect your profits and keeps your international finances in order

If you need any professional assistance to obtain UAE TRC, you can always CONNECT WITH US

Example on the benefits of a UAE Tax residence certificate

A UAE-based consulting company earns $100,000 from a client in Country A. Country A normally charges a 15% withholding tax on payments made to foreign companies ?

❌ Tax Cost where the UAE Company does not have a UAE TRC

As UAE-based consulting company doesn’t have a UAE Tax Residency Certificate, Country A would consider the payment liable to WHT as under : –

• Withholding tax charged by Country A –  15% of $100,000 = $15,000
• Net amount received by the UAE company: $100,000 – $15,000 = $85,000
• ❗ The total cost of UAE company is  $15,000 . If a credit is available , then UAE company can claim a credit for the WHT deducted overseas against its UAE taxable income to a maximum extent of 9,000 and the remaining $6,000 would still be a loss  .

✅  Tax Cost where the UAE Company has a UAE TRC

As UAE-based consulting company has a  UAE Tax Residency Certificate, Country A would consider the payment liable to WHT @ 5%.

• Withholding tax after applying treaty –  5% of $100,000 = $5,000
• Net amount received by the UAE company: $100,000 – $5,000 = $95,000
• The company saves $10,000 in taxes . It can also claim a credit of such taxes against its UAE taxable income

✅ Conclusion

A UAE TRC can save you lot of taxes withheld overseas, that may not be available as a credit against your UAE income .

If you need any professional assistance to obtain UAE TRC, you can always CONNECT WITH US